Atomic Swap. What It Is and Its Importance for the World of Cryptocurrencies
Is the ability to transfer coins that are based on different blockchains without third parties real? In general, yes, it is, but as elsewhere, there are pitfalls and nuances in this issue. Today we will talk about such a development as an atomic swap, we will learn how it works and what prospects it has. Contents: (please click the topic to scroll down to it) Recently, the cryptocurrency community has been discussing a new and truly revolutionary idea that can transform the industry beyond recognition. Atomic swaps make it possible to conduct trading operations between different cryptocurrencies without using the help of third parties. In order for the parties to not deceive each other, both transactions are synchronized. If one of the participants suddenly decides to refuse to conduct an exchange operation, the funds will return to their holders. Test atomic swaps are already functioning; if they prove their reliability, then this will have colossal consequences for the entire cryptocurrency industry. This technology can arrange a total restructuring of orders in the market, up to the complete replacement of the familiar cryptocurrency exchanges. With the help of atomic swaps investors can get full access and control over their own assets. To understand this rather difficult process it is necessary to simplify and have a visual picture in the head. So, let's take two users A and B. User A is the initiator of this imaginary transaction. To begin with, he creates a place where funds will be stored at the time of the swap, we’ll call it the deposit box or the address of the contract. To open it you need several components:
- secret phrase (generated by user A);
- electronic signature of user B.